Spotify is spending Monday reacting to comments by producer Nigel Godrich that criticize the subscription service’s business model. Godrich’s statements have received attention throughout the music press, the British press and the Wall Street Journal.
In a series of tweets on Sunday, Godrich’s voiced his displeasure with Spotify’s payouts for new releases and announced the decision to pull three titles from the service: Thom Yorke’s “Eraser,” Atoms for Peace’s “Amok” and the self-titled album by Godrich’s project, “Ultraísta.” All three albums are unavailable at Rdio and Deezer as well. However, “Eraser” can still be streamed at Rhapsody and both “Eraser” and “Amok” are available at Google Play Music All Access.
Godrich made his comments to attract attention to a business model that “will be extremely valuable” but doesn’t adequately pay artist and labels and is “bad for new music.”
CEO Daniel Ek (@eldsjal) took to Twitter to defend the company’s business model. Streaming “is now a very big revenue source” in some markets and shows no evidence of cannibalizing purchases, he wrote.
Ek also noted that new releases by Daft Punk and Jay-Z sold well after being available as pre-release streams. (Sales of Daft Punk’s “Random Access Memories” were undoubtedly helped by the preorders that resulted from its pre-release streaming at iTunes. The album was not made available to Spotify or other subscription services ahead of street date.). He could have also mentioned Mumford and Sons’s “Babel,” which broke Spotify streaming records while posting the best first-week sales of the year to date.
In its public statement, Spotify emphasized its goal of building a service that provides financial support to the music industry. “We’ve already paid US$500M to rightsholders so far and by the end of 2013 this number will reach US$1bn.”
The statement continued, saying the company is “100% committed to making Spotify the most artist-friendly music service possible, and are constantly talking to artists and managers about how Spotify can help build their careers.”
Radiohead singer Thom Yorke (@thomyorke), whose “Eraser” album was produced by Godrich, joined the conversation by saying corporate interests were being put above those of artists. He tweeted that new artists discovered on Spotify will not get paid and shareholders “will shortly be rolling in it,” a reference to a future acquisition or public stock offering that could be a financial windfall for Spotify’s investors.